Fifty years ago, when Martin Luther King spoke at the March on Washington, one of the demands was a minimum wage increase from $1.15 to $2 an hour. That would be just over $15 in today’s dollars.

In case we’re tempted to get carried away with this “dream,” the Chicago Tribune offers us University of Chicago economist Allen Sanderson’s advice: “Don’t fight for 15.”

All in all, it’s a pretty thorough demonstration of how far the dismal science can stray from any connection with reality.

First of all, he warns that if workers become too expensive, they risk being replaced by automation. In fact, though, it’s really hard to imagine how much more automated McDonald’s could be. Or to picture computerized checkouts at Macy’s.

He suggests higher wages would mean even higher unemployment rates for minority teens. That might be a factor if there were a better job market for older people, but there isn’t — especially with an economy that is quickly replacing middle-class jobs with low-wage ones.

In fact the surge in youth unemployment came before the 2008 crash, while the economy was growing (not very fast), as federal funding for youth jobs was eliminated. As we noted at the time, it was the first economic recovery in which youth unempoyment increased. That was without a minimum wage hike, too.

Really poor?

Sanderson then looks into the “claim” that “one can’t live on $8.25 an hour and that someone working full-time would be in poverty.” Not true at all, he says — a full-time minimum wage worker earns $16,500 a year, a generous $1,000 above the federal poverty level for a two-person household.

Of course, if the full-time worker had two kids rather than one, the family would be at about 20 percent below the poverty level. Which is not exactly quibbling.

And the poverty level is widely discredited. It was developed in the 1960s and is based on a moderate food budget, multiplied by three. But since then other costs — particularly housing and health care — have grown at a much higher clip.

In 2009 the Social Impact Research Center of the Heartland Alliance estimated (pdf) that in order to meet basic needs in Illinois — housing, child care, food, transportation, and health care — using tax credits but not public benefits (with no allowance for leisure, travel, or emergencies), a single parent of two children would have to earn $23 an hour.

WBEZ recently profiled a part-time Macy’s worker who earns minimum wage plus commissions. She also works second part-time for minimum wage as a telemarketer. She’s got four children and a partner who also works a minimum wage job. She’s also on food stamps and Medicaid.

“At the end of the week, I still don’t have enough money to put food on the table and clothes on my children’s back,” she says.

Who pays?

A crucial question, Sanderson says, is who will end up paying for these wage increases. Will it be stockholders with lower returns, or customers with higher prices?

We looked at this a couple weeks ago, when the Tribune asked whether customers would be willing to pay higher prices to cover higher wages — but failed to give any idea of what those prices might be. You’d think an economist would be interested in this detail.

How about McDonald’s shareholders? According to Paul Buchheit, the corporation’s profits average out to $18,200 per worker. There’s certainly room to pay a little more without too much pain at the top.

But there’s another question that’s just as crucial, which never seems to get asked: who pays for the low-wage economy? Besides Macy’s workers who can’t quite cover food and clothes, that is.

Who pays for the food stamps and Medicaid to supplement Macy’s minimum wage? Who pays the $5,815 a year that an average Wal-Mart worker gets in public benefits?

Right after that come all the residents who don’t get the services they need — like the hundreds of thousands who’ve had their health care cut, including hundreds of medically-fragile children and many others shunted into nursing homes. Or the thousands of Chicago schoolchildren who don’t have libraries or art teachers.

Because Macy’s and Wal-Mart need our tax assistance in order to keep their wages low. (And please don’t ask them to pay more taxes!) Why aren’t the deficit hawks at the Tribune screaming about that?

Beyond that, everyone who’s waiting for the economic tide to rise — all the unemployed, underemployed, and discouraged workers, all the small businesses that are barely hanging on — would be helped by the immediate boost to our economy of higher wages for a major sector of the workforce. Workers with a little extra money will spend it, and that’s good for everyone. The Center for Tax and Budget Accountability has estimated that a $2 boost to our minimum wage would inject $2.5 billion into the state economy and generate 20,000 jobs.

That could even help get more people shopping at places like McDonald’s, or at Macy’s and Wal-Mart — all reporting declining sales, all citing slack consumer demand.

Instead, our political and opinion leaders are forcing us into a downward spiral of growing low-wage work, anemic job creation, and increasing austerity in public services.

The members of the Workers Organizing Committee are displaying remarkable courage, standing up for themselves and their families in a threatening economic environment, with little besides their own solidarity and nerve to sustain them. In fact they are standing for a better economy for all of us.

Meanwhile the defenders of the status quo deploy every scare tactic they can to get them to back down.

My guess is that’s not going to work.

***

The invaluable Dirt Diggers Digest gives an overview of McDonald’s history in light of Thursday’s strike –including union resistance when the company initially tried to move into San Francisco and Detroit in the 1970s, McDonald’s role pushing for a lower minimum wage for teenagers, and its resistance to efforts to ensure that farmworkers picking its tomatoes are paid decently.

“More than any other restaurant operator, [McDonald’s] has worked to suppress pay rates, enforce harsh work procedures and prevent unionization. In other words, it epitomizes everything that the current strikes are trying to change.”

But “McDonald’s response to the farmworker campaign shows that, when put under enough pressure, it will make concessions.”

The meeting takes place August 7 to 9 at the Palmer House, 17 E. Monroe; the rally takes place there on Thursday, August 8 at 12 noon.

Long a major but shadowy behind-the-scenes player, ALEC came to prominence in the aftermath of Trayvon Martin’s killing, when the group’s role working with the NRA to promote Stand Your Ground legislation became known.

With funding by major corporations and membership by one-third of the nation’s state legislators, ALEC provides model legislation in a wide array of areas.

The group joins corporate America’s economic agenda with a right -wing social agenda, according to In These Times editor Joel Bleifuss. He joined Rey Lopez-Calderon of Common Cause and Brian Echols of Concerned Black Men on a recent episode of Chicago Newsroom to discuss ALEC. (Watch it here.)

“They’re a great example of the power of Corporate America in American politics,” Bleifuss says.

“We think it’s tax fraud,” Lopez-Calderon says. Common Cause and the Center for Media and Democracy recently filed a complaint with the IRS charging ALEC with filing fraudulent tax returns.

ALEC has gone after collective bargaining rights, clean energy legislation, and campaign finance reform, Newsroom panelists relate. The group is behind a series of restrictive voter ID laws as well as SB 1070, Arizona’s controversial “Show Your Papers” law.

Echols notes that, on behalf of private prison corporations, ALEC has pushed the War on Drugs’ harsh sentencing laws, targetting African Americans and vastly increasing the nation’s prison population. Now they’re pushing laws that will increase the detention of immigrants on behalf of the same corporations, Lopez-Calderon notes.

“They’ve viewed this as a long-term way for corporations to make money,” he says, adding that ALEC helped create the Corrections Corporation of America.

Schools and prisons

ALEC is also behind efforts to push charter schools and the privatization of public education. In Illinois the group’s model bill created the Illinois Charter School Commission, which has the power to approve charter applications that have been turned down by local school districts.

One major beneficiary is K12, a nationwide purveyor of virtual charter schools now moving into Illinois, Echols notes.

“My view is they’ve got them coming and going,” he says — making money providing inferior education on the front end, then making money from incarcerating young people who can’t find gainful employment and are forced into the street economy.

According to Lopez-Calderon, ALEC’s guiding light is Margaret Thatcher, who pioneered the idea of finding ways for corporations to profit by taking over public sector functions. (He adds that “in terms of Thatcherism,” Mayor Emanuel “is lockstep with this agenda.”)

For extensive background, see the Center for Media and Democracy’s website, ALEC Exposed.

]]>Will higher wages hurt the economy?https://www.newstips.org/2013/08/will-higher-wages-hurt-the-economy/
Sun, 04 Aug 2013 19:28:40 +0000http://www.newstips.org/?p=7581Higher wages for fast food and retail workers could hurt the economy, according to an analysis by the Chicago Tribune.

The analysis includes comments from the Workers Organizing Committee, which led hundreds of workers from national chains, from Wendy’s to Potbelly and from Sears to Victoria’s Secret, in strike actions here last week. They’re not looking to double wages to $15 an hour overnight; they’re trying to organize a union and address a range of issues.

It also includes a Whole Foods employee who works two additional jobs and still qualifies for food stamps, and a labor economist who is quoted to the effect that high unemployment helps lower wages.

But its major thrust is whether consumers can stand to pay the higher prices that they say higher wages would require. The economists they ask about this specialize in consumer psychology and marketing behavior.

One crucial piece of information is omitted, curiously: how big of a price increase are we talking here?

In a column reviewing “the boilerplate argument against higher wages” — which is precisely that it would hurt consumers with “enormous” prices increases — David Sirota fills us in.

Raising the minimum wage to $10.50 would add 5 cents to the price of a Big Mac, according to one analysis. Another study found that raising McDonalds workers’ hourly rate to $15 would drive the price of a Big Mac up by 22 cents.

Run that by your consumer psychologist.

A recent study by Action Now and Stand Up Chicago found that raising Chicago retail and restaurant workers’ wages to $15 an hour would cost about $100 million for a sector with $14.2 billion in yearly revenues in the city. That’s about 2.6 percent of revenue.

“Downtown employers can afford a very significant increase in wages,” they argue.

It’s an important reality check to vague scare talk about higher prices. That line of arguent works because it involves a “populist insinuation that higher wages would hurt the Average Joe,” according to Sirota.

On average, the huge chains, those with more than 500 employee in the state — about 2 percent of the firms, with about 60 percent of market share — pay 18.5 percent less than smaller companies.

McDonalds’ profits last year were $5.5 billion. And they don’t want to give their workers a $3-an-hour raise because they’d have to charge 5 cents more for a hamburger?

“Retail and fast food outlets in the Magnificent Mile and the Loop are among the country’s most profitable, but their workers take home poverty wages to the city’s poorest neighborhoods,” said Katelyn Johnson of Action Now in a statement supporting WOC strikers.

“We know that they need and deserve a living wage to support their families. And every dollar invested in a living wage will raise up the economy for all of the city’s neighborhoods.”

CTBA estimates that by increasing consumer spending, raising the minimum wage by two dollars would generate 25,000 jobs in Illinois and increase economic activity in the state by $2.5 billion.

But there’s a much larger question missed by the Trib’s analysis: can the U.S. economy handle the wholesale replacement of middle-class employment with low-wage jobs?

They’ll rally at the Rock-n-Roll McDonald.s, 600 N. Clark, at 6 a.m. and take buses to McDonald’s corporate headquarters, where they’ll rally again at 8 a.m.

Temporary workers

Meanwhile, the efforts of the Chicago Workers Collaborative to expose the exploitative and discriminatory role of underground labor brokers known as raiteros, supplying workers for temporary staffing agencies and charging steep transportation fees, has been featured recently by Pro Publica and Marketplace.

Staffing workers and their supporters will present a proposal for basic labor standards to staffing agency owners on Thursday, May 23, at 10:30 a.m., at 1400 W. Hubbard.

]]>Hyatt workers want a seat at the tablehttps://www.newstips.org/2013/03/hyatt-workers-want-a-seat-at-the-table/
Tue, 19 Mar 2013 23:19:46 +0000http://www.newstips.org/?p=7063Hyatt housekeepers say they have a solution to the corporation’s reputation for labor abuses — add a worker to the board of directors.

(Meanwhile Chicago parents say that the departure of Hyatt board member Penny Pritzker from the school board here opens an opportunity for community input in selecting her replacement; more here.)

Hundreds of hotel workers will meet Wednesday, March 20 at 5 p.m. at the Chicago Temple, 77 W. Washington, to nominate Cathy Youngblood, a Hyatt housekeeper from Los Angeles, to a seat on the corporation’s board.

They’ll be joined by supporters including elected officials and labor, community, and faith leaders.

Hyatt workers in Chicago have been working without a contract since 2009, with Hyatt refusing to follow other hotels here in negotiating over subcontracting and workloads, said Carly Karmel of UNITE-HERE Local 1.

Last year a global boycott of Hyatt was declared by a coalition including the AFL-CIO and NOW, citing the chain’s practice of subcontracting out work at minimum wage, as well as heavy workloads and injury rates as much as twice those of other hotels.

One factor was the support of a local group that helped pioneer the worker center movement, which utiliizes community organizing strategies to assist low-income and immigrant workers with workplace issues.

Workers at Artistic Stitches Inc., joined by leaders from Arise Chicago, will discuss the significance of their victory at a media event Thursday, January 31 at 12:45 p.m. outside their plant at 2639 W. Grand.

The mainly Latino packers and machine operators voted last week to join Workers United, a union with roots in historical garment and textile industry unions that’s affiliated with SEIU.

Stitches workers contacted Arise after they staged a spontaneous walkout to protest working on Thanksgiving without holiday pay, said organizer Jorge Mujica. He explained their protections from retaliatory firings under labor law.

But when they started discussing their problems in the workplace,”there were so many different issues that we could never solve them one by one,” Mujica said. “It would take months, years.” He told them, “You guys need a union.”

Among the issues was the company’s practice of laying off its workforce every December and hiring them back the next month, without seniority and sometimes at substandard apprentice wage levels, Mujica said. Other issues ranged from hygiene to preferential treatment – and a holiday pay policy that changed from year to year, he said.

Workers United is seeking a meeting with management to begin negotiating a contract, said Margarita Klein of the union’s Midwest regional board. Otherwise the union will launch a “first contract campaign.” “We’re really hoping they will try to have a smooth transition,” she said.

It’s the first organizing victory for the union in some time, and the partnership with Arise Chicago was crucial, Klein said. “It was a perfect relationship,” she said. “And this is only the beginning.”

]]>Common sense on pension reformhttps://www.newstips.org/2013/01/common-sense-on-pension-reform/
https://www.newstips.org/2013/01/common-sense-on-pension-reform/#commentsThu, 10 Jan 2013 00:11:56 +0000http://www.newstips.org/?p=6865Lots of gnashing of teeth over the failure of the legislature to “do something” about pension reform.

Some sensible sorts point out we’re probably better off without the plan put forward in the House, which would have been challenged in court and almost certainly found unconstitutional, since the vast bulk of its savings came from reducing the benefits of current state workers and retirees.

In Arizona, which has a constitutional provision like Illinois’s barring any diminishment of pension benefits, a recent reform plan was found unconstitutional – and the state was ordered to pay workers back with interest, points out Ralph Martire of the Center for Tax and Budget Accountability.

If there’s one thing we’ve seen this week it’s the wisdom of the 1970 Constitutional Convention in protecting state workers from lying, thieving politicians — and from honest, well-intentioned ones who try to fix their messes without seeing the big picture.

All the plans on the table are focusing on the wrong area of the problem, Martire says. “We don’t have a benefits crisis, we have a debt crisis.” It’s the predictable result of the 1995 “reform,” which pushed the problem down the road by steeply backloading pension fund payments.

Stabilize the debt

CTBA has proposed amortizing the pension debt over 45 years, which would head off steep pension contribution increases now facing the state — and in fact reduce pension costs over time.

With 45-year amortization, the $8 billion annual pension contribution and debt service would be stabilized and would gradually but steadily come down, approaching $6 billion by 2045. That’s a lot of money, but it’s a lot less than $16 billion each year projected 30 years down under the current scenario.

Even under Governor Quinn’s pension stabilization plan, which depends on courts validating a choice for retirees between full health coverage and promised cost-of-living increases, state contributions rise steeply after the next few years to unaffordable levels – somewhere between $10 billion and $12.5 billion a year by 2040, according to CTBA.

By getting the state off the escalator, amortization is a sensible first step toward dealing with the crisis, and Martire expects legislation to accomplish that in the coming session.

Another sensible step would be sitting down with the unions that represent the workers who are affected by this crisis.

Talk to unions

State workers want a sustainable solution as much as anyone, and they’ve gone so far as to propose increasing employee contributions if the state will close corporate tax loopholes (including several where Illinois leads the nation in giveaways) and provide a legal guarantee that state contributions will be made.

They point out that at the Illinois Municipal Retirement Fund, which is legally required to make its pension contributions, no funding problem exists – yet none of the proposals now on the table include such a guarantee.

[CORRECTION: The House bill would require annual contributions, but unions say its enforcement provisions are limited and inadequate.]

The coalition of state workers unions has renewed its call for a pension summit with lawmakers.

“The lame-duck session made it clear once again: Legally dubious proposals developed without working with those most directly affected — public employees and retirees — are a recipe for failure,” said the We Are One Illinois coalition in a statement.

Fairness

There’s also the common-sense notion of fairness: state workers and retirees haven’t caused the crisis – they’ve made their payments with every paycheck – and they aren’t living high on the hog, especially the large majority who aren’t eligible for Social Security.

Finally, common sense would dictate that Illinois has to address its fundamental fiscal problem – a revenue system that looks for money in all the wrong places.

The regressive tax structure – with low-income residents paying twice as much of their income to state and local taxes as the wealthiest do – leaves untouched the sector that’s reaped the most economic gains in recent decades. And of course, as Quinn has pointed out, half of Illinois corporations pay no income tax.

CTBA and the League of Women Voters are working on a constitutional amendment allowing a progressive income tax – which would reduce most taxpayer’s rates — for voter consideration in 2014.

It’s one of a number of serious efforts to address the state’s revenue crisis. There will be no real solution to these problems without taking this on.

]]>https://www.newstips.org/2013/01/common-sense-on-pension-reform/feed/3Walkouts at Wal-Marthttps://www.newstips.org/2012/11/walkouts-at-wal-mart/
https://www.newstips.org/2012/11/walkouts-at-wal-mart/#commentsWed, 21 Nov 2012 00:39:51 +0000http://www.newstips.org/?p=6763An unprecedent rolling strike wave hitting Wal-Marts across the country – started in September by warehouse workers in northern Illinois and southern California – will include walkouts by employees at a number of Chicago-area Wal-Marts on “Black Friday” this week, organizers say.

Meanwhile organizers working with temporary staffing agency workers charge Wal-Mart is evading the wage commitment it made when it entered Chicago two years ago by using temps to fill positions in its stores here. Chicago Workers Collaborative is backing staffing workers in Wal-Mart stores who recently filed a wage theft lawsuit against the company.

Wal-Mart employees who will be striking on Friday will speak at rallies on Wednesday, November 21, from 5 to 8 p.m. at two Chicago Wal-Marts, 570 W. Monroe and 3630 N. Broadway.

Small one-day strikes started last week at two California Wal-Marts, with workers later walking out at two stores in Dallas and six in Seattle.

****

“It’s time for us to speak out,” said Tyrone Robinson, an associate at a Chicago Wal-Mart. “If we don’t speak out, things are just going to stay the same.”

Robinson is a member of OUR Wal-Mart (Organization United for Respect at Wal-Mart), a nonunion association which has been joined by thousands of Wal-Mart associates in the past year.

“Wal-Mart is the largest retailer in the world,” Robinson said. “They could afford to give us decent wages and health insurance and better hours. They just choose not to.”

One major complaint is the company’s practice of cutting associates’ hours. Robinson says he was working 40-hour weeks when he started at Wal-Mart a year ago, but since then his hours have been “drastically reduced.”

“I was doing fine,” he said. “I had a 40-hour week and I was able to keep my own apartment. I was on my way to getting some kind of vehicle.” He takes public transit and often has to be at work at 3 a.m.

But since since his hours were cut, “I had to move in with my grandmother,” he said. “Now I have a two-hour commute.”

There are other immediate concerns. The company is increasing health premiums by as much as 36 percent following another steep increase last year, and has raised the number of hours needed to qualify for health coverage from 24 to 30 a week.

And after opening for the first time on Thanksgiving evening last year, this year they’re moving the opening time two hours earlier, to 8 p.m. That’s not welcomed by associates who have to be at the store hours earlier, said Marc Goumbri, a local organizer for OUR Wal-Mart.

****

A central issue is the charge that Wal-Mart punishes employees who speak out. That was also an issue in the September strikes by warehouse workers. Members of Warehouse Workers for Justice here struck for three weeks after a Wal-Mart subcontractor fired a WWJ member who’d filed a wage theft lawsuit.

The warehouse strikers won reinstatement for fired members and full wages for all strikers, said Leah Fried of WWJ. Delegations travelling to Arkansas for the corporation’s stockholders and “stakeholders” meetings also won a meeting with a Wal-Mart vice president, the first time an official of the corporation has met with a labor organization.

Fried says Wal-Mart acknowledged its responsibility for conditions in its warehouses, including ensuring that its policies permitting freedom of speech and association are followed by subcontractors. The group is pressing for a follow-up meeting with Roadlink, an employment agency that supplies the Wal-Mart warehouse in Elwood, near Joliet.

But Fried said retaliation continues, leading WWJ to file additional labor board complaints last week. “We’re going to need to continue to wratchet up pressure to hold Wal-Mart accountable,” she said.

WWJ is holding an action in support of Wal-Mart associates Friday at 9 a.m. at the Wal-Mart Supercenter at 2424 W. Jefferson in Joliet.

****

Wal-Mart has responded to OUR Wal-Mart’s plans by filing an unfair labor practice complaint, charging the strikes are part of a union organizing drive, and with letters warning employees who are absent for scheduled work time. (On Tuesday the National Labor Relations Board declined to issue an injunction blocking Friday’s actions.)

In fact, OUR Wal-Mart represents a new approach that recognizes the difficulty of union organizing in the face of Wal-Mart’s vehement anti-union strategies, with labor law providing only weak protections.

As noted here, the NLRB has found Wal-Mart guilty of a range of violations – spying, harassment, intimidation, illegal firings – but minor penalties have had no impact. According to Human Rights Watch, Wal-Mart ‘has translated its hostility toward union formation into an unabashed, sophisticated and aggressive strategy to derail worker organizing at its U.S. stores that violates workers’ internationally recognized right to freedom of association.”

“We are pro Wal-Mart workers,” said Moises Zevala of Local 881 of UFCW, which supports OUR Wal-Mart. Previously UFCW has sought to organize Wal-Mart workers; the company closed all its butcher departments nationwide after seven butchers in a Texas Wal-Mart voted to affiliate with UFCW twelve years ago.

“We know our communities are desperate for jobs, and we want Wal-Mart to improve the wages and working conditions to make their jobs worthwhile rather than bringing everybody’s standards down,” Zevala said.

“Because these are poverty wages, all they do is put our neighborhoods deeper in debt; they don’t get them out of poverty,” he said.

He notes that since coming to Chicago in 2010, Wal-Mart has increasingly relied on temporary labor to staff its stores. “They had an opportunity when they came here to give people good wages, good hours and benefits; instead they have created an even lower tier,” he said.

****

Dozens of workers at staffing agencies who are sent to unload trucks and stock shelves overnight at Wal-Mart stores in Chicago have told organizers with the Chicago Workers Collaborative that they’re paid $8.25 an hour, said Leone Jose Bicchieri.

That’s 50 cents less than the $8.75 hourly rate which Wal-Mart promised they’d pay local employees during talks with City Council members who approved a West Side store two years ago, he points out.

CWC, which organizes temporary workers, assisted with a class-action lawsuit filed earlier this month charging Wal-Mart and its subcontractors with violating federal wage and overtime laws by requiring workers to show up early, stay late, work through lunches and breaks, and participate in trainings, all without compensation.

It’s apparently the first wage-theft lawsuit filed by workers in Wal-Mart stores [in Illinois]. A number of such complaints have been filed by Wal-Mart warehouse workers.

(The staffing agency targetted in the lawsuit is Labor Ready, the company that hired Jdimytai Damour, who was trampeled to death when shoppers broke through the door at a Long Island Wal-Mart on Black Friday four years ago.)

The problem is the temporary labor industry as a whole, Bicchieri said, which he described as “a system that’s designed to fail workers and provide maximum profits to client companies.”

For example, since contractors pay workers’ compensation, Wal-Mart managers are less concerned about injuring workers, pushing them to handle heavy loads more quickly, Bicchieri said. He said CWC has uncovered cases where labor contractors who submitted low bids actually sent less than the agreed-on number of workers for a job, putting greater stress on workers who have to take up the slack.

“It’s exploitation squared,” he said.

****

On Tuesday, in yet another Wal-Mart-related action, CWC and OUR Wal-Mart members protested labor abuses, including uncompensated hours, for staffing agency workers at the Phillips-Norelco plant in Roselle, which supplies Wal-Mart with electric shavers.

According to Bicchieri, Wal-Mart charges $189 for Norelco’s Senso-Touch razor, while hundreds of workers who assemble, pack and ship the product get $66 for 10- and 11-hour days at the plant.

“While Norelco asks Walmart shoppers to ‘upgrade their shave,’ we have to shine a light on the downgrades in Norelco’s labor practices.” he said. “This facility has some the worst conditions for workers in our state.”

CWC called on Wal-Mart “to hold its major supplier of electric razors accountable.”